Why this challenge could boost wireless carrier profits without adding cost

When Google speaks, the world takes notice. Perhaps that was the hope of Google’s Developer Advocate Don Dodge when he presented at the recent MIT Technology Review Digital Summit. In part of his presentation, Dodge spoke about the Internet of Things (IoT) and the current mismatch between the pricing needs of companies leveraging IoT and the pricing models offered by wireless carriers.

How Does the IoT Model Work with Our Current Focus on Fast?

In two words, it doesn’t.  Wireless carriers today are highly focused on adding speed and capacity to their networks – at a significant cost. But Dodge notes that for IoT applications, cheap networking is more important than fast networking.

Dodge even goes so far as to say that perhaps a “brand new network is required” and notes that IoT users won’t pay wireless providers $40 a month to transmit a few kilobytes of data every few days.

A different perspective, to be sure.

Wireless Carriers Have an Opportunity to Blend Cheap and Fast

Dodge’s “new network” comment certainly got people talking (see the comments section of the article).  Personally, the thought of creating a new wireless network when one already exists sounds a bit untenable.  Still, Dodge’s challenge to the wireless world isn’t to be ignored. There is an opportunity for wireless carriers to leverage IoT as a new revenue source, but the current wireless business model will need to think and act a bit differently.

  • Remain Flexible when it Comes to IoT Customers – If the value proposition is no longer about speed and capacity, carriers will have to rethink everything from product development and advertising to sales channels and support to be successful when working with IoT customers. IoT customers will bring a whole new business model to the table. Wireless carriers need to listen to their needs and assemble their offers accordingly.
  • IoT Sounds Nice, But Can You Bill for It? – Carriers also need to make sure they have a back office rating and billing solution that is powerful and flexible enough to accommodate IoT’s requirements. Wireless carriers should be able to create pricing plans and rate usage to support the highly customized – even one-off – products, services and pricing that different IoT customers may demand. One size will not fit all for IoT.
  • Building a Revenue Stream without Network Strain – Carriers need to understand their true costs and create additional efficiencies to maximize IoT margins. Perhaps they can direct IoT users to push their device updates only during off-peak hours or limit billing cycles to quarterly. Carriers need to look for ways to reduce costs while still allowing IoT users to secure network access at a reasonable price.

Taking everything into consideration, IoT could be a win for wireless carriers. You may not see the latest IoT pricing plans advertised during the next Super Bowl, but the potential is there for wireless carriers to leverage their existing network infrastructure and build new revenue streams from the IoT.

Google has thrown down the gauntlet.

Ready to accept the challenge? We can show you how it’s done.